COOPEKATIVE PURCHASING AND MARKETING ORGANIZATIONS. 57 
to accumulate a surplus large enough to meet the early advances, 
and as the money is required only for a short time, if accumulated it 
would be idle a large part of the year. 
Heretofore perishable products have not been considered as good 
collateral by bankers in making loans to business enterprises, but per- 
ishable products marketed through an efficient organization are now 
considered good security by many bankers in making loans to such 
cooperative marketing associations. The amount of money required 
in handling perishable products will vary according to the size of the 
business and the methods of conducting it. Some organizations 
which conduct merely a consignment business and do not make 
advances to the growers need but a small amount with which to 
meet general running expenses. In many cases this is provided by 
money received from the issuance of capital stock, membership fees, 
or the accumulation of a surplus a sufficient part of which is in such 
shape that it can easily be converted into cash. Many organizations 
have developed a large f. o. b. business, making drafts against ship- 
ments, making arrangements with the bank to honor them, and 
placing them to the credit of the association. This provides funds 
for immediate use and materially decreases the amount of outside 
help needed in financing. In cases where pools are made, advances 
to the members are often necessary as the pool may not be entirely 
closed until months after the first receipts come in. If it is possible 
to secure sufficient funds to make the early advances, the returns 
from shipments as received will take care of other amounts advanced 
to the growers. In some of the successful produce associations lo- 
cated in the Atlantic States, the organization buys the members' 
product outright, paying for it at the time of delivery. Under this 
plan of operation large sums are necessary. 
Security for loans obtained. — Of the organizations reporting on the 
amounts borrowed as shown by Table V, 38 gave association notes 
as security. Forty-six gave personal security, that is, company 
notes indorsed by the directors or individual members who were con- 
sidered financially responsible. Three reported having given no 
security, as bankers advanced funds on overdraft as required. Two 
found it necessary to give mortgages on the packing plants. One 
association has obtained about $300,000 from bankers on ware- 
house receipts covering nuts in storage. One secured a large loan 
from bankers on warehouse receipts for apples which were in storage. 
These figures show that over half the organizations are able to 
borrow the funds necessary to make advances to members and to 
meet the expenses of the early marketing season, without security 
other than that which the organization can give, but a surprisingly 
large number, or 26 out of 72 organizations, are so organized that it 
